SLOC loses top legal eagle

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The Independent Online

One of the most senior executives at Sun Life of Canada has suddenly resigned, prompting rumours that all is not well with the company, which recently demutualised with a flotation on the Toronto stock market.

One of the most senior executives at Sun Life of Canada has suddenly resigned, prompting rumours that all is not well with the company, which recently demutualised with a flotation on the Toronto stock market.

Gregory Gee, SLOC's vice-chairman and legal council, who has worked for the company since 1987, resigned on 1 October, leaving the following week. The speed of his departure, and the fact that policyholders and shareholders were not informed about the resignation of such a senior figure, has surprised observers.

"Whatever's going on is big and they don't want it coming out," said one source. "You don't lose one of your top men unless it's seismic."

"Mr Gee has moved on to bigger and better things," said a spokesman for SLOC. "His departure was a pretty low-key affair." The spokesman would not say where Mr Gee is now working, although he did say that company employees were informed six days after Mr Gee tendered his resignation. Regulators around the world were also informed before Mr Gee left the company.

"This short period [between resignation and departure] is not unusual with someone so senior because of conflict of interests," said the spokesman. Shareholders and policyholders received no notification.

SLOC demutualised at the end of March. Since then, the UK arm, which has just under £14bn in funds under management, has become a full subsidiary of the Canadian-based parent company.

The UK operation has been associated with pensions mis-selling and the endowments issue. It is also rumoured to be under investigation by the Financial Services Authority (FSA) over the sale of endowment policies, which could lead to disciplinary action if it is found guilty.

Further problems may ensue if the company is forced to pay compensation. Under the FSA's guidelines, the life insurance industry is in some cases required to compensate policyholders for mis-selling. Last year, SLOC reported losses of £126m in the UK. This was largely caused by the provision of £186m to cover the pensions mis-selling review.

Third-quarter figures show no increase in provisions for the first nine months of this year, begging the question of what will happen if SLOC is forced to pay compensation to endowment policyholders.

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